FEATURED ARTICLES ABOUT RISK MANAGEMENT - PAGE 5

This last September marked the second anniversary of the collapse of some of the largest banks in the US. Across the globe, much water has flown under the "reform" bridge during the last two years: governments have spent hundreds of billions of dollars on fiscal stimulus packages and bailing out failing financial institutions, lower economic growth has become the new normal in much of the developed world, regulators have implemented new...

NEW DELHI: The government is likely to stand guarantee to Life Insurance Corporation (LIC) for risk management losses, instead of amending the LIC Act to allow it to tap the market or infuse fresh capital. The government guarantee is being preferred as it will neither require amendments to the LIC Act, nor will it require the finance ministry to make additional budgetary provision. Although LIC can easily raise over Rs 6,000 crore by offloading just 5% government stake and meet IRDA's solvency norms, the finance ministry has ruled out this option as it required the "political decision" to amend the LIC Act. Financial sector secretary NS Sisodia said, "There is no consideration for amending the LIC Act. To enable LIC to tap the market, we need to corporatise LIC. But the common minimum programme provides that there can be no structural change in LIC and it will remain a PSU. " While ruling out LIC's IPO, Mr Sisodia said, "The ministry can work out an alternate plan.

When the United States created an integrated system for fighting forest fires in 1910, it failed to recognise one important thing: forests need fire. People who live close to the forests know this, but policy makers in the newly industrialised economy perceived fires as destructive. The 'zero tolerance' programme of putting out every small fire actually made things worse, with the frequency of large fires increasing. This is because small fires reduce fuel loading, clear land for shrubs and flowers and remove forest litter that nurture insects.

MUMBAI : In the face of volatile commodity prices, the Ruia's promoted Essar Group has initiated benchmarking its risk management system with global practices. The group, which has significant exposure in oil and steel sectors, finds itself at the receiving end, like its peers, with fluctuations of any kind in commodity prices. "The initiative will help us mitigate our risk profile in various businesses and we expect a sizeable reduction in our transportation costs which will help the bottomline," Essar Group's Group CEO V G Raghavan told media.

MUMBAI: In the face of volatile commodity prices, the Ruia's promoted Essar Group has initiated benchmarking its risk management system with global practices. The group, which has significant exposure in oil and steel sectors, finds itself at the receiving end, like its peers, with fluctuations of any kind in commodity prices. "The initiative will help us mitigate our risk profile in various businesses and we expect a sizeable reduction in our transportation costs which will help the bottomline," Essar Group's Group CEO V G Raghavan said.

TOKYO: A year ago, when Shinsei Bank Chairman Masamoto Yashiro was asked why Japanese banks had been able to avoid the worst of the financial crisis, he dismissed it as something akin to a lucky break. Since the crisis, Shinsei and other companies across Asia have been trying to take luck out of the equation. They are investing in computer systems and strengthening internal controls to improve their ability to identify and mitigate risk. Asian companies were not at the heart of what triggered the crisis, but they were blindsided by the fallout, from banks booking heavy losses on asset-backed securities to manufacturers having difficulty raising funds after credit markets seized up. The troubles faced in Asia in part reflect a relatively cavalier attitude to managing risk, especially in fast-growing economies like South Korea, says Duncan Martin, a partner at Boston Consulting Group.

NEW DELHI: Industry body Assocham asked authorities to consider putting in place a more effective risk management mechanism to counter the potential risks posed by online electronic banking . In a paper submitted to the Finance Ministry and the Reserve Bank of India , the industry chamber observed that funding and investment related risks could elevate with the e-banking initiatives depending on the volatility ...

CHENNAI: The office of finance is transforming itself into a strategic advisory role to guide the organisations in coping with the operational challenges during turbulent and uncertain times. The key focus areas of the office have dramatically changed for the good. They are now focused on future landscape, opportunities and challenges, planning, analysis and financial management through effective real time operational data. At the ET forum on " role of finance to weather volatile economy & performance management, organised in Chennai on Wednesday in association with IBM India as knowledge partner, chief financial officers, representing different sectors, discussed how real time analytics of operational data can provide the necessary insight to tackle those challenges.

BENGALURU: Business is as usual at Housing.com about a week after a car accident killed two employees and injured two others, including co-founder Advitiya Sharma who was at the wheel. But the horrific crash has raised questions about the lack of risk management among Indian startups, considering the huge amount of trust and resources put in the hands of young tech founders. The crash, was one of the first serious accidents involving the leadership of a prominent startup in India.

MUMBAI: Life Insurance Corp of India, the country's largest institutional investor, has scrapped bulk trading on stocks exchanges, in a bid to bury the ghost of investigating agency probe into alleged corruption. "We have stopped participating in block and bulk deals in the market. We have taken this step to strengthen our risk management practices and follow a transparent method," said a senior executive from LIC. In November 2010, LIC's books had come under the scanner of the Central Bureau of Investigation for alleged irregularities in certain investments.